***
**Are there instances of sustainability KPIs used as loan covenants in your portfolio?**
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## Assessment Instructions
Intent: What is the purpose of this indicator?
Identify mechanism(s) within loan agreements that are tied to enforcing borrower-controlled sustainability aspects/KPIs. Participants should select the applicable scope and provide examples and/or additional context.
Input: How do I complete this indicator?
Select Yes or No. If Yes, please select applicable checkboxes and complete the open text box.
**Note:** If 'property type' and/or 'specific region' checkbox(es) are selected - participants must elaborate on which cases covenants are used.
**Open text box:** Description provided should fully support each checkbox selected, along with the following elements:
1. Specify any third-party standards that are referenced in covenants;
2. Elaborate what sustainability-related metrics are utilized in loan covenants.
**Other:** Answers provided under 'Other' must be outside the options listed in the indicator to be valid. This indicator contains two options to provide an answer:
1. After selecting Yes, state loan scope where sustainability-related covenants are used.
2. Under 'specific financing' participants must note for which loan type covenants are used.
#### Terminology
**Loan covenant**
> Condition included in loan terms that requiring the borrower to fulfil certain conditions or taking certain actions.
**New construction**
> Includes all borrower activities to obtain or change building or land use permissions and financing.
**Retrofit/renovation**
> Includes all borrower activities to modify an existing building’s systems and/ or structure in order to improve building performance or tenant amenities.
**Tenant fit-outs**
> Alterations undertaken by either the tenant or the borrower to design, refurbish or decorate a leased space, making it fit for tenant purpose. Tenant improvement allowances are generally provided by the borrower, to a tenant, at time of lease origination.
Validation: What evidence is required?
No evidence required. Only the 'Other' answer is manually validated.
#### **Other Answer**
If 'property type' and/or 'specific region' checkbox(es) are selected, an additional explanation must be provided, which is subject to manual validation.
The answers provided under 'Other' are subject to manual validation.
Validation Basics
## Scoring
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Scoring: How does GRESB score this indicator?
The scoring of this indicator is equal to the sum of the fractions assigned to the selected options and respective sub-options, multiplied by the total score of the indicator.
If 'specific property type' and/or 'specific region' checkbox(es) are selected, an additional explanation must be provided, which is subject to manual validation.
**Open text box:** The open text box is not scored and is for reporting purposes only.
**Other:** The 'Other' answer is manually validated and assigned a score which is used as a multiplying factor, as per the table below:
| Validation status | Score |
| ----------------- | ----- |
| Accepted | 1/1 |
| Not Accepted | 0 |
| Duplicate | 0 |
Scoring Basics
***
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